Thereby the courts can assure the legally binding character of the codes and enable their enforcement and judicial review.

n contrast, the economic cultures of continental Europe, with their neocorporatist institutions, have historically been long directed toward an internal politicization of economic decisions. Alongside wide-ranging social welfare state interventions, the institutions of economic democracy are held to be legitimate particularly because they, through the participation of labor in corporate decisions, are supposed to compensate for market failures (Abelshauser 2005). In their adaptation to democratic corporatism of continental Europe, the corporate codes are being redefined: no longer seen as unilateral enactment by sovereign enterprises, they are instead understood as the result of political conflicts between enterprises and civil society actors.

The EU legislature provides sanctions in § 5 I No. 6 Law Against Unfair Competition against enterprises that give false data about the observation of a code of conduct to which the enterprise has obligated itself in a binding fashion, if it refers to that binding (Beckers 2015, 176 ff.).

4. The codes’ impulses for economic democracy If the internal politicization of the European corporate culture has thus markedly influenced the corporate codes, in the opposite direction three new impulses of economic democracy have also been unleashed. The codes of conduct, in turn, produce effects for the democratization of the economy. Their first impulse stems from a change in direction of the protest movements, in which, according to some observers, a new political quality in society has been realized (Crouch 2011; O’Brien et al. 2002, 2). Civil society protests direct themselves increasingly no longer (only) against institutions of the state but selectively, directly, and intentionally against corporate actors in the market, which are accused of violating their public responsibilities. Social movements react thereby to drastic power shifts in the global economic constitution. The actual economic pouvoir constituent has been taken over by transnational enterprises, because it is they who, through their unilateral public self-obligation, enact and implement the corporate codes. However, first and above all, it is social movements that by their protest initiate these corporate codes, codetermine their contents, and monitor their implementation. For it is mostly the NGOs and other actors in civil society who have compelled multinational corporations to conclude agreements with them regarding corporate codes through their protest actions. In their activities, civil society’s actors realize a particular potential of corporate codes for economic democracy that goes well beyond the traditional neocorporatist arrangements, which in continental Europe were developed only between enterprises and labor unions. Their second impulse for economic democracy drastically extends the substantive themes of the politicization of the economy. Corporate codes no longer only mediate the distributive interests of capital and labor within the enterprise. The civil society protests go much further than these important but limited themes, and compel corporations to establish encompassing goals of the public interest with self-binding force: environmental protection, antidiscrimination, human rights, product quality, consumer protection, data protection, freedom of the internet, and fair trade.26 While such themes had been earlier almost exclusively decided within the political system, a strange paradox of economic democracy arises as a result of direct confrontation of civil society groups with corporations: the public interest will be implemented through private ordering (Vallejo 2020, 321 ff.; Beckers 2015, 262 ff.) Of course, the corporate codes cannot, like political legislation, claim universal validity. However, their obligatory power goes well beyond the individual enterprise. For the civil society groups insist that the power of corporate law arrangements extends to dependent corporations and that contractual agreements bind large networks of supply and distribution. Their third impulse for economic democracy proceeds from the self-obligation of enterprises to guarantee fundamental rights. Here, the codes go much further than the current doctrines of third-party effect of fundamental rights. For they break through the state-centered character of fundamental rights and recognize explicitly a direct effect of fundamental rights on private collective actors. And they make up for certain weaknesses of the state-law protective duties. If the fundamental rights standards of the codes result directly from the democratic potential of social conflicts, then a higher contextual adequacy is to be expected because organizations and procedures are more exactly calibrated to the particularities of the fundamental rights conflicts.27 V. Conclusion Globalization has produced a complex transnational economic constitution, which needs to be understood as a meta-constitution regulating collisions of constitutions. The colliding units are not nation-states but transnational production regimes that extend well beyond national boundaries. The alternatives—ordoliberal economic constitution and social democratic economic democracy—formulated by Böhm and Sinzheimer have been replaced by the opposition between the institutionally strong, tightly woven production regimes of continental Europe, organized by neocorporatism, and the liberal finance capital–marked Anglo-American production regimes. Against all predictions, the neocorporatist constitutions of European economies today are undergoing a renaissance, which shows that despite globalization and economic crisis, they are not only resilient but also have a future potential. Moreover, the corporate codes that have emerged in the sweep of globalization have opened, beyond the protection of workers’ rights, a new opportunity for powers that are external to the corporation, alongside the opposing power of civil society—the media, public debate, spontaneous protest, intellectuals, protest movements, NGOs, labor unions, and the professions—and the legal norms created by state intervention. These powers exercise such massive pressure on enterprises that they are compelled to enact self-binding restrictions oriented to the public interest. The crucial issue is whether principles of economic democracy have a potential to be developed under conditions of transnational societal constitutionalism. One should not over-hastily transpose the classical democratic principle of identity of authors and affected people, which made sense in the national political context. A recontextualization of democracy that requires generalization as well as respecification is needed today under the conditions of transnationalization. As for generalization, political representation, the traditional concept of democracy for the nation-state, needs to be replaced by self-contestation, which has to be firmly institutionalized in transnational regimes. As for respecification, self-contestation can be established not in a one-size-fits-all approach but in wide variations that reflect the extreme epistemic diversity among issue-specific transnational regimes. Author Notes Translated from the German by Eric Engle. For inspiration and criticism, I wish to thank Achim Seifert. Parts of the argument have been published in Italian Law Journal 1 (2015). Author Biography https://www.jura.uni-frankfurt.de/42832482/Zur_Person___Englisch Footnotes 2.On Franz Böhm, see Grossekettler (2005). On Hugo Sinzheimer, see Kahn-Freund (1981). For Böhm’s early key work, see Böhm (1933). For Sinzheimer’s early key work, see Sinzheimer (1916). On Sinzheimer’s labor constitution, see Dukes (2011). 3.Extending Max Weber’s and Karl Polanyi’s work to today’s transnational conditions (Frerichs 2017). 4.For detail on the coordination problems of different system rationalities in world society, see Fischer-Lescano and Teubner (2004), 1005 ff.; see also Kjaer (2010) 494, 533. 5.For a recent critique of the ordoliberal version of economic constitutionalism, see Hien and Joerges (2020). 6.In this sense, somewhat similarly, see Zweigert and Kötz (1992), § 3 II. For a critique, see Frankenberg (1985); for a reconstruction, see Michaels (2006). 7.Already, in the early discussion on globalization, it became clear that Huntington (1993) with his apocalyptic predictions had exaggerated global divisions. A more realistic view sees a simultaneous increase in convergence and divergence as a consequence of globalization (Featherstone and Lash 1995). 8.Varieties of capitalism is acknowledged as the leading theory of comparative political economy in the OECD; see Feldman (2019); Witt et al. (2018); Hassel (2014). The actual reference book is Hall and Soskice (2005). 9.For a comparative perspective, see Feldman (2019); Witt et al. (2018). For important regional studies, see Walter and Zhang (2012); Schneider (2013). On the highly contested politics of constitutionalization, distinguishing between “ambitious” and “modest” programs, see Kennedy (2020), 117 ff. His concept of politicization is too narrow, since he reduces it to conflicts between groups with ideologies and excludes disruptive conflicts between social rationalities, which he calls “obscurantist” (115). 10.Koselleck (2002); Selznick (1969). It was David Sciulli (1992) who coined the term “societal constitutionalism.” 11.For the recent debate on a material constitutional theory, see Goldoni (2018). 12.On transnational societal constitutionalism, which lies at the bottom of such a conception of the transnational economic constitution, see Muir Watt (2018); De Munck (2016); Kjaer (2014); and the contributions by Poul Kjaer, Dan Wielsch, and Moritz Renner in Teubner and Becker (2013). 13.Primarily, general theories of social differentiation, in particular constitutional sociology, the theory of private government, and the concept of societal constitutionalism. For details, see Teubner (2012b) 3 f. 14.For details on Wiethölter’s constitutional theory, see Teubner (2019). 15.Economic cultures do not correspond to nation-state borders (Abelshauser 2005). 16.The Swedish model of corporatism has not been done away with in this phase but rather has been transformed and adapted to the conditions of globalization. See, for details, Flume (2012). 17.It was this very cooperation that was the target of harsh critique by American corporate lawyers: “… inefficient decisions, paralysis, or weak boards, and that these costs are likely to exceed any potential benefits that worker participation might bring” (Hansmann and Kraakman 2001, 445). 18.Stiglitz (2009). Similar suggestions are even made in Great Britain: “Labour’s Economic Plans: Departmental Determinism,” Economist, January 1, 2014. 19.Cumbers (2018) suggests via an econometric analysis that there is a strong causal relation between the EDI and inequality, as measured by the Gini coefficient. 20.On the constitutionalization of multinational corporate groups and their codes, see Ruggie (2018); Backer (2016); Backer (2012a); Teubner (2012a). 21.On these three types of norms in US law, see Peukert (2014). For a recent example of these tendencies, see the VW decision of the FTC that refers to VW’s corporate codes: https://www.ftc.gov/news-events/press-releases/2016/03/ftc-charges-volkswagen-deceived-consumers-its-clean-diesel. 22.Talaulicar (2009) analyzes the effects of different economic cultures on the implementation of the codes. Arbeitsgericht Wuppertal NZA-RR 2005, 476; Landesarbeitsgericht Düsseldorf NZA-RR 2006, 81. See Klösel (2012) 59 ff. 23.For an extensive analysis of the Lidl case, see Verbraucherzentrale Hamburg v. Lidl, Statement of Claim filed 6 April 2010, case settled on 14 April 2010, http://www.business-humanrights.org/Categories/Lawlawsuits/Lawsuitsregulatoryaction/LawsuitsSelectedcases/LidllawsuitreworkingconditionsinBangladesh. 24.Most prominently, Habermas (2012). For an elaboration of this critique, see Möller (2016), particularly 166 ff. 25.Luhmann (1990). 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he EU legislature provides sanctions in § 5 I No. 6 Law Against Unfair Competition against enterprises that give false data about the observation of a code of conduct to which the enterprise has obligated itself in a binding fashion, if it refers to that binding (Beckers 2015, 176 ff.).

American courts sympathize with this view and show themselves hesitant when public-interest litigation pushes them to implement the codes as legally binding rules (Revak 2012). The courts are open only to juridify market-based social norms. They make social norms that accompany market processes legally binding there, only insofar as they implement consumer preferences where these are sabotaged by false or misleading information. However, they deny the core material of the corporate codes (i.e., social norms), which proscribe a common-good orientation to the corporations, the imposition of legal obligation with an appeal to judicial restraint.20

Collisions between these two economic constitutions can be traced back to markedly significant differences between the two great production regimes: the European production regimes (mainly Germany, Sweden, Norway, Finland, Netherlands, Switzerland, and Austria), on the one hand, and the Anglo-Saxon regimes of liberal market economies (Britain, the United States, Ireland, Canada, and Australia), on the other. The Anglo-American economic culture forms a group, styled as liberal market economies (LME), of relatively unregulated liberal market economies. In contrast to the European markets, with stronger economic democratic and social welfare state orientations—so-called coordinated market economies (CME) in which neocorporatist negotiating arrangements between economic associations, trade unions, and the government coordinate the economy—industry associations and labor unions in the Anglo-American area are rather weak and play only a very limited role of coordination in the institutional framework (Hall and Soskice 2005). Instead we find there a relatively uncoordinated coexistence of free market processes, on the one hand, and external regulation by the government, on the other hand. There, the government, regulatory authorities, and the courts play the most important role in the formation of regulations whereby the rules typically include little margin of appreciation.

Production regimes are institutional framework conditions for economic activity (Hall and Soskice 2005). They structure the production of goods and services by way of markets and market-related institutions. The “rules of the game” of economic activities—more exactly, the incentives and constraints of economic transactions—will be formulated through an entire ensemble of institutions, in which economic activity is embedded. The single institutions—enterprise financing, managerial education, contractual relationships between enterprises, interorganizational networks, standardization processes, and interenterprise conflict regulation—together form an interlocked system which tends toward self-regulation.

lobal corporate governance is likewise marked by a tendency to create a high degree of autonomy for transnational enterprises (Backer 2012a). The principles of corporate governance of multinational enterprises are a high degree of enterprise autonomy, capital market orientation of corporate law norms, and the establishment of shareholder values. The resulting multinational corporate governance has two goals: to break the tight coupling of transnational enterprises on nation-state politics and rules and to build up rule-of-law structures insofar as these are necessary for their worldwide functionally specified communication. “The End of History for Corporate Law”—this was Henry Hansmann’s and Reinier Kraakman’s (2001, p. 439) message in an influential article: “Despite very real differences in the corporate systems, the deeper tendency is toward convergence.” And the direction was clear: “There is no longer any serious competitor to the view that corporate law should principally strive to increase long-term shareholder value.” (For a critique, see Coffee 1999).

hereby the courts can assure the legally binding character of the codes and enable their enforcement and judicial review

American courts sympathize with this view and show themselves hesitant when public-interest litigation pushes them to implement the codes as legally binding rules (Revak 2012). The courts are open only to juridify market-based social norms. They make social norms that accompany market processes legally binding there, only insofar as they implement consumer preferences where these are sabotaged by false or misleading information. However, they deny the core material of the corporate codes (i.e., social norms), which proscribe a common-good orientation to the corporations, the imposition of legal obligation with an appeal to judicial restraint.20

Collisions between these two economic constitutions can be traced back to markedly significant differences between the two great production regimes: the European production regimes (mainly Germany, Sweden, Norway, Finland, Netherlands, Switzerland, and Austria), on the one hand, and the Anglo-Saxon regimes of liberal market economies (Britain, the United States, Ireland, Canada, and Australia), on the other. The Anglo-American economic culture forms a group, styled as liberal market economies (LME), of relatively unregulated liberal market economies. In contrast to the European markets, with stronger economic democratic and social welfare state orientations—so-called coordinated market economies (CME) in which neocorporatist negotiating arrangements between economic associations, trade unions, and the government coordinate the economy—industry associations and labor unions in the Anglo-American area are rather weak and play only a very limited role of coordination in the institutional framework (Hall and Soskice 2005). Instead we find there a relatively uncoordinated coexistence of free market processes, on the one hand, and external regulation by the government, on the other hand. There, the government, regulatory authorities, and the courts play the most important role in the formation of regulations whereby the rules typically include little margin of appreciation.

Production regimes are institutional framework conditions for economic activity (Hall and Soskice 2005). They structure the production of goods and services by way of markets and market-related institutions. The “rules of the game” of economic activities—more exactly, the incentives and constraints of economic transactions—will be formulated through an entire ensemble of institutions, in which economic activity is embedded. The single institutions—enterprise financing, managerial education, contractual relationships between enterprises, interorganizational networks, standardization processes, and interenterprise conflict regulation—together form an interlocked system which tends toward self-regulation.

Global corporate governance is likewise marked by a tendency to create a high degree of autonomy for transnational enterprises (Backer 2012a). The principles of corporate governance of multinational enterprises are a high degree of enterprise autonomy, capital market orientation of corporate law norms, and the establishment of shareholder values. The resulting multinational corporate governance has two goals: to break the tight coupling of transnational enterprises on nation-state politics and rules and to build up rule-of-law structures insofar as these are necessary for their worldwide functionally specified communication. “The End of History for Corporate Law”—this was Henry Hansmann’s and Reinier Kraakman’s (2001, p. 439) message in an influential article: “Despite very real differences in the corporate systems, the deeper tendency is toward convergence.” And the direction was clear: “There is no longer any serious competitor to the view that corporate law should principally strive to increase long-term shareholder value.” (For a critique, see Coffee 1999).